Oil and gas investors have made clear they see long term potential in the North Sea even as some fear the area is set to become ‘uninvestable’.

With Labour threatening to hit firms with fresh tax increases if it wins the General Election that must be held soon, industry leaders have warned firms will abandon the UK and shift spending overseas.

Trade body Offshore Energies UK sounded the alarm about univestability last month in response to Labour’s announcement that it would hike the rate of the windfall tax introduced in 2022. The party also plans to scrap the investment allowance that was introduced that year, which environmentalists claim provides massive subsidies for wealthy corporations.

OEUK said Labour’s plans would put thousands of jobs at risk and undermine the UK’s energy security by increasing reliance on imports.

The fear in industry circles is that the planned changes could be the final straw for many firms following a raft of changes in the last two years.

But sceptics may feel they have heard such warnings before. North Sea firms enjoyed boom conditions amid the surge in oil and gas prices fuelled by Russia’s war on Ukraine.

READ MORE: North Sea giants expect oil price amid SNP tax bluster

Within hours of OEUK sounding its uninvestability warning overseas heavyweights announced deals that could pave the way to them investing in some big North Sea developments.

The following day the firm that is leading work on plans for the controversial Cambo development West of Shetland, Ithaca Energy, revealed it had entered exclusive talks to merge with the North Sea production portfolio amassed by Italian giant Eni.

The deal will create a firm that produces more than 100,000 barrels per day.

The assets concerned include interests in a range of fields that Eni acquired through the $4.9 billion (£3.9bn) takeover of private equity-backed Neptune Energy. That deal was announced in June 2023, months after........

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